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How Will the Energy Crisis Impact on Manufacturer’s Net Zero Ambitions?

The energy crisis that is currently fuelling record price increases for British bill payers shows no signs of abating. A surge in natural gas prices has subsequently seen energy costs escalate, with energy suppliers and commentators alike already predicting that the current situation will continue for the next two years.

Some manufacturing bodies such as UK Steel have already warned that ‘extraordinary’ electricity prices are wiping out profits and leading to less reinvestment. Representatives from the glass, cement, ceramics and chemical industries have similarly called on ministers for support. The added pressure of major price increases means that many businesses, particularly energy-intensive sectors like manufacturing, are having to rapidly reassess their energy priorities. Many are now investing what funds they have available for energy infrastructure into cost-saving measures, which often means that efforts to address sustainability are put on the back burner.

Changing energy priorities

A survey by Vattenfall in January 2021 found that while 90% of intensive energy users had plans in place to cut their carbon emissions, more than a third are now looking to postpone these investments to deal with the more pressing problem of the gas price crisis. Changes such as rapid EV charging, a vital part of a decarbonisation strategy as the UK transitions away from internal combustion engines, become impractical when they risk significantly adding to energy bills and take up vital CapEx that could be spent on cost-saving measures.

The energy crisis brings into focus the need for a rebalance and reform of energy costs, something that the Energy Intensive Users Group (EIUG), an umbrella organisation that represents various energy-intensive manufacturers, has long been calling for. Despite the difficulty caused by increased prices, the need for decarbonisation isn’t going away, putting many manufacturers in a difficult position where choosing to focus on short-term cost saving risks delaying decarbonisation further down the road. The longer it takes for a comprehensive sustainability strategy to be created and actioned, the more difficult and expensive it will become for them to achieve net-zero.

The Government is still considering a range of methods to alleviate the impact of the energy crisis, with radical change possible ahead of the reset for the domestic price cap in April. As it stands, the price cap is expected to increase by 46%, or around £1,865, driving a further six million households into fuel poverty. While businesses are similarly affected, there is currently less pressure on the Government to act to protect industry from energy prices, and energy-intensive businesses are likely to be left to find their own solutions for now.

Finding the right technology solution

Fortunately, some technologies are available that not only reduce energy costs, but also contribute to decarbonisation. Which technology provides the best fit in this situation is an increasingly complex conundrum, factoring in ease of installation and project turnaround times to deliver cost savings as quickly as possible, as well as the more typical concerns surrounding ROI periods and impact on carbon footprint. On-site generation such as roof-mounted solar has the potential to dramatically reduce energy bills, but can have lengthy lead times. Similarly, battery storage has the ability to transform the way a business manages, uses and pays for energy, but represents a significant investment and wait before it can be commissioned.

Voltage optimisation represents one technology that meets this complex mix of criteria, being relatively quick and non-intrusive to install while offering a significant reduction in overall energy consumption and a boost to sustainability and energy efficiency. By conditioning incoming power, voltage regulation can eliminate the excess electricity consumed on your site due to overvoltage and boosts sustainability through improved energy efficiency. Providing your equipment with conditioned power also helps to reduce maintenance and increase lifespan, as well as preventing sensitive equipment being disrupted in the event of fluctuating voltage or other minor power disruptions. Find out more about how one UK manufacturer reduced their energy costs and eliminated more than 85 tonnes of CO2e from their carbon footprint using voltage regulation here.

You can get started with your own voltage regulation project with a no-obligation desktop proposal to assess the impact this technology could have on your business.